First,
the $16.3 billion includes $11.2 billion in increased premiums from the
Pension Benefit Guaranty Corporation – which is itself $26 billion in
debt!

But for arguments sake, let’s leave that aside for a second.

This
bill reduces the debt by $16.3 billion only if you don’t include the
$18.8 billion transfer from the Treasury to the Highway Trust Fund! Or
the transfer of $2.4 billion from the Leaking Underground Storage Tank
(LUST) Fund to the Highway Trust Fund!

So, here’s how the Senate math works:

Add
up the revenue (from things like changes to pensions) and subtract out
the expenses (for things like Secure Rural Schools and Payment in Lieu
of Taxes) = $16.3 billion in deficit reduction

Ignore
the $18.8 billion transfer from the Treasury (because, in Congressional
parlance that nobody in the real world could possible understand, it
would not increase “direct spending”, duh!, so it doesn’t count) and the
$2.4 billion transfer from LUST. In fact, you can see how the Senate
treats both provisions (“This provision does not have a budgetary effect.”) in the Senate Finance summary.

Result? $16.3 billion in debt reduction!!!!! (see how easy that was?)

The House math is a little different, because their budget rules treat the HTF differently:

Add
up the revenue (from things like changes to pensions) and subtract out
the expenses (for things like Secure Rural Schools and Payment in Lieu
of Taxes) = $16.3 billion in deficit reduction

Unlike
the Senate, the House rules don’t let them ignore the $18.8 billion
transfer from Treasury (but they are still allowed to ignore the LUST
transfer).

Count
the $2.7 billion in revenue increases from the National Flood Insurance
Program, despite that CBO itself concluded: “However, because many
policies would continue to be subsidized and the program would continue
to face significant interest costs from its prior and future borrowing,
CBO expects that additional receipts collected under this legislation
would be spent to cover future program shortfalls, resulting in no net
effect on the budget over the 11-year period.”

Result? $200 million in debt reduction (see how easy that was?)

This
is the same bad math that would sink any small business, bankrupt any
taxpayer, and that got us into the fiscal mess we currently find
ourselves. But Congress was unashamed passing this bill and claiming it
would reduce the deficit.

Let’s do the math as we see it:

Start with the $16.3 billion in deficit reduction the CBO found. Looking good so far!

But
we need to subtract the $11.2 billion increase in pension premiums,
right? Since the PBGC is $26 billion in debt and any premium increase
should go toward that. Result = $5.1 billion in deficit reduction. Not great, but still in the black!

But don’t forget the $18.8 billion transfer! For our purposes, we’ll count that as real spending, because it is. Result = $13.7 billion in deficit spending. Uh oh.

But
what about the money from the flood insurance reforms? Yeah, we won’t
be counting that. We’ll leave that to settle the debt the National Flood
Insurance Program owes the Treasury. Result = still $13.7 billion in deficit spending. D’oh.

Should
we add the $2.4 billion LUST Transfer, which would only make the
deficit spending figure even worse? Some would, some wouldn’t. But
either way, it doesn’t really matter.

The simple facts are that:Result: MAP-21 is a terrible bill for taxpayers.

Quick Version of Congress' Tortured Math

Senate Math

House Math

Real Math

Explanation

CBO Number

$16.30

$16.30

$16.30

CBO Calculated net Treasury revenue

PBGC Premiums

($11.20)

Increased revenue, but should be applied to PBGCs $26B debt

Total, New net revenues

$16.30

$16.30

$5.10

Treasury Xfer to HTF

nope

($18.80)

($18.80)

Straight transfer, Senate rules don't count it as deficit spending

Total, revenues after xfer

$16.30

($2.50)

($13.70)

Flood Insurance

$0.00

$2.70

nope

Bill increases premiums, but should be applied to the flood insurance program's debt

The
following is a written statement of Ms. Ryan Alexander, president of
Taxpayers for Common Sense, on H.R. 4348, the transportation
reauthorization conference report
(aka Transportation Omnibus)

Washington, DC
- We are deeply disappointed that Congress has chosen the easy way out
in funding transportation reauthorization. By initiating another massive
Treasury bailout of the transportation program, Congress fails to face
head-on the acute funding challenges the nation’s transportation program
faces. Congress relies on a transfer of nearly $19 billion from the
Treasury to pay for increased transportation spending, on the heels of
$34.5 billion in transfers since 2008. Stealing from Peter to pay Paul
is irresponsibility at its very worst, especially when Peter – the
Treasury – is already broke.

To offset the costs of the Treasury larceny, lawmakers rely on a variety of budgetary smoke and mirrors.

For
example, this bill contains two major changes to private and federal
pension systems: an increase in premiums to the Pension Benefit Guaranty
Corporation (PBGC) and so-called “pension smoothing.” Increased
premiums for the PBGC are welcome to protect taxpayers from the prospect
of a future federal bailout. Ironically, however, the pension smoothing
provisions – which will reduce private corporate pension contributions
in the near term – will have just the opposite effect, exposing the PBGC
to potentially greater future liabilities, and therefore exposing
taxpayers to greater risk. In addition, using increased revenues for the
PBGC – which is itself $26 billion in debt – as justification for
increased spending in transportation is ludicrous at best.

Even
worse, it will take 10 years of increased revenues from these changes
to the pension system to pay for just 26 months of transportation
spending. That bears repeating: 10 years of revenues will pay for just
two years of transportation.

We
are deeply concerned that continuing current funding levels under the
9-time extended SAFETEA-LU transportation legislation is pushing the
Highway Trust Fund toward insolvency. However, the reauthorization
Congress is considering takes the country to the same place the current
path would: a taxpayer bailout of the Highway Trust Fund. Congress has
not cut spending nor increased user-based revenues to pay for this bill
or ensured the sustainability of the transportation program. Congress
has simply increased spending and used budget gimmicks to convince
itself this spending is ‘paid for.’ When this bill expires in 2014, the
transportation program will be in even worse condition. The highway and
mass transit trust funds within the HTF will be nearly broke, and the
pay-fors that ‘funded’ this bill will not be available for the next
bill.

In
addition to the funding challenges this bill faces, Congress has also
made a Christmas tree out of this legislation by attaching to it a flood
insurance reform bill, student loan rate reduction, and other unrelated
provisions.

While
Taxpayers for Common Sense has fought for flood insurance reforms for
several years and actually supports the package included in the
transportation omnibus, the legislation should be debated on its own
merits. Flood insurance reform hasn’t even been considered by the full
Senate. If it had, leadership might not have had to jettison a key
reform requiring purchase of flood insurance in areas that, while behind
a levee, still retain significant flood risk for property owners. This
provision would have lowered rates for many policyholders and provided
protection for taxpayers and millions of Americans in harm’s way.
Instead, shortsighted parochial politics and members’ desires to get
home for the July 4th holiday won out.

Finally,
whether it is unemployment insurance extensions, payroll tax holiday,
or in this case, student loan rate reduction, the scattered stop-gap
economic measures have to come to a final resolution. Continued
extension of short-term fixes eventually creates an expectation of
permanence. We urge Congress and the Administration to come up with
final agreements on how to deal with these “temporary” issues instead of
waiting for the crush of expiration and making the decision with a
finger in the political winds.

For
all of these reasons, Taxpayers for Common Sense opposes the
transportation omnibus in its current form. The different legislation
crammed into the omnibus merit independent consideration. Furthermore,
Congress must face head on the challenge of appropriately funding the
nation’s transportation program, and must do so in a manner that
preserves the user-pays principle. It has been obvious for many years
that the current gasoline tax is not enough to meet the desire of
Congress to spend on transportation. But this bill takes the easy way
out, and fails to take the difficult steps that would help put our
transportation program on sound fiscal footing into the future.